Key Farm Bill Provisions of Fiscal Cliff Package

Direct payments coming for 2013 crops, but no new dairy program as MILC program is extended

NOTE:This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The fiscal cliff package agreed to by Congress and that will be signed into law by President Obama includes an extension of most policy in effect on Sept. 30, 2012, under the 2008 Farm Bill -- with some exceptions.

A quick summary: The agreement would include a one-year (through Sept. 2013) extension of the 2008 Farm Bill -- one major exception was the SURE program was not reauthorized at all. It would include direct payments for 2013 crops. It would not include language for a controversial new dairy gross margin/supply management program but instead extends the Milk Income Loss Contract (MILC) program effective 9/30/2012 to 9/30/2012. MILC was restored to its pre-9/1/2012 parameters, costing $110 million. This was offset by a $110 million reduction in the Nutrition Education and Obesity Prevention Grant Program. Regarding disaster provisions, the bill makes funding discretionary – an authorization for appropriations, but no mandatory funding. The bill's language authorizes, but does not actually fund, the following: $80 million for livestock indemnity payments; $400 million for the livestock forage disaster program; $50 million for emergency assistance for livestock, honey bees, and farm-raised fish; $20 million for trees assistance. For the 37 farm programs that lost their base, the package authorizes but does not fund those programs. The same is true for energy-related programs via the 2008 Farm Bill. "This is Mitch McConnell's farm bill" said Senate Ag Chairwoman Debbie Stabenow, who said she would vote for the overall agreement but is "on record that I am not happy with what was done to agriculture."

Details(Source: CQ House Action reports)

Agricultural Programs Extension

The bill generally extends through the end of FY 2013 most provisions of farm policy as they were in effect on Sept. 30, 2012, under the 2008 Farm Bill, thereby preventing farm policy from reverting to underlying permanent 1949 farm policy law.

Most agriculture policy and programs under the 2008 Farm Bill expired before or on Sept. 30, while dairy programs expired Dec. 31. The bill's authority would be retroactive back to Sept. 30, and any current programs with expiration dates later than the end of FY 2013 (such as five conservation programs that were reauthorized through FY 2014 in an FY 2012 spending bill) would not expire until those dates.

For the duration of the extension under the bill, the measure ends mandatory funding for a number of programs that used to be entirely mandatory or a combination of discretionary and mandatory; instead, funding for those programs would instead be entirely discretionary. Those programs include certain food stamp-related programs, agricultural research, energy, horticulture and organic agriculture, and assistance for socially disadvantaged farmers or ranchers programs.

The Congressional Budget Office estimates that extending the agriculture programs and the supplemental agriculture disaster assistance programs would cost nearly $5 billion in FY 2013 but would result in no additional costs, relative to CBO's baseline.

Commodities

The measure extends current commodity terms and conditions for all commodities for the 2013 crop year, including sugar cane, sugar beets and peanuts. It also extends through Dec. 31, 2013, the Dairy Product Price Support Program and the Milk Income Loss Contract Program.

Conservation Programs

The bill maintains the maximum enrollment in the Conservation Reserve Program at the same level (32 million acres) that has applied for fiscal years 2010 through 2012.

The voluntary public access program would be discretionary for FY 2013, authorized at $10 million. (It previously received about $50 million a year in mandatory funding.)

SNAP

The bill authorizes discretionary funding for two programs under the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), which had received mandatory funding.

SNAP's employment and training programs would be authorized at $79 million for FY 2013 (an $11 million reduction from the $90 million in mandatory spending it received in FY 2012).

The nutrition education and obesity prevention grant program, meanwhile, would be authorized indefinitely, with annual authorizations specified through FY 2015 (rising from $285 million in FY 2013 to $407 million in FY 2015), and annual authorizations after that time to increase with inflation. The program received $375 million in mandatory funding for FY 2012.

Research Programs

The measure authorizes $25 million in discretionary funding in FY 2013 for the organic agriculture research and extension initiative and $100 million for FY 2013 for the specialty crop research initiative. Those programs received $45 million and $150 million, respectively, in mandatory spending in FY 2012.

It authorizes $30 million in discretionary funding for the beginning farmer and rancher development program, which received $49 million in mandatory funding in FY 2012.

Energy Programs

The bill extends through the 2013 crop year the Agriculture Department's mandate under the feedstock flexibility program to purchase eligible commodities and sell them to bioenergy producers.

It authorizes $20 million in discretionary funding for FY 2013 for the biomass crop assistance program — it previously was a mandatory program — and requires the Agriculture Department to obligate enough funds from the first fiscal year of a multiyear contract to cover the whole contract.

It also authorizes $1 million in discretionary funding for the biodiesel fuel education program.

A number of existing discretionary energy programs would be reauthorized at their previous levels — including funding for the biobased markets program, biorefinery assistance, repowering assistance, the bioenergy program for advanced biofuels, the rural energy for America program, biomass research and development, rural energy self-sufficiency initiative, forest biomass for energy, and the community wood energy program.

Horticulture and Organic Agriculture

The bill authorizes $10 million in discretionary funding for FY 2013 for the farmers market promotion program (which received an equal amount of mandatory spending in FY 2012), and $5 million for the clean plant network for FY 2013 (also equal to its FY 2012 mandatory funding).

It authorizes $5 million in discretionary funding for FY 2013 for the organic production and market data initiatives ($5 million below its FY 2012 level).

The measure also authorizes $22 million for the national organic certification cost-share program for FY 2013, which would remain available until expended.

Assistance for Socially Disadvantaged Farmers or Ranchers

The bill authorizes $20 million in discretionary funding for FY 2013 for the outreach and technical assistance for socially disadvantaged farmers or ranchers (equal to the level of mandatory funding provided in FY 2012).

Disaster Assistance

The bill authorizes funding for certain agricultural disaster assistance programs from the 2008 farm bill that had expired at the end of FY 2011 — a year before the rest of the farm policy law.

Specifically, it authorizes (no mandatory funding) for both FY 2012 and FY 2013:

-- $80 million a year for livestock indemnity payments;

-- $400 million a year for the livestock forage disaster program;

-- $50 million a year for emergency assistance for livestock, honeybees and farm-raised fish; and

-- $20 million a year for the tree assistance program.

Terminated Programs

The bill would not extend authorizations for a number of programs, including local and regional food aid procurement, the McGovern-Dole International Food Program and market loss assistance for asparagus producers.

It also does not extend survey and report requirements regarding foods purchased by school food authorities, pending rural development loan and grant applications, value-added agricultural market development program grants, the National Sheep Industry Improvement Center or the rural microentrepreneur assistance program.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.